System for preventing improper use of credit cards

ABSTRACT

A system for preventing improper use of credit cards having necessary data recorded thereon in card-actuated machines, wherein the system checks for a predetermined correspondence between the data read from a card inserted into the machine, and the data manually entered by the user of the card. If a correspondence does not exist, the stored number of times of absence of said correspondence with respect to the individual card is increased. When the stored number reaches a predetermined number, the card is invalidated.

YZSB? QR ,731,076

United States Patent 1 1 11 1 1 3,731,076

Nagata et a1. [4 May 1, 1973 1 SYSTEM FOR PREVENTING 3,587,051 6/1971Hovey ..317/134 R IMPROPER USE OF CREDIT CARDS FOREIGN PATENTS 0RAPPLICATIONS [75] Inventors: Masanori Nagata; Keisuke ()salti,

both f Kyoto Japan 1,197,183 7/1970 Great Britain ..235/6l.7 B

[73] Assignee: Omron Tateisi Electronics Co., primary Examiner -rhomasRobinson Kyoto Japan Altorney-Christensen & Sanborn [22] Filed: Feb. 25,1971 57 ABSTRACT [21] App1.No.: 118,600 1 1 A system for preventingimproper use of credit cards having necessary data recorded thereon incard-actu- [301 Foreign Application Priority Data ated machines, whereinthe system checks for a Mar. 3, 1970 Japan 45/184196 pr e erminedcorrespondence between the data read from a card inserted into themachine, and the data [52] US. Cl. ..235/61.7 B, 317/134, 340/149 Amanually entered by the user of the card. If a cor- [51] Int. Cl ..G06f7/04, H04q 3/02 respondence does not exist, the stored number of [58]Field of Search ..235/61.7 B, 61.7 R; times of absence of saidcorrespondence with respect 340/149 A, 149 R; 179/90; ZOO/61.66; to theindividual card is increased. When the stored 70/278; 317/134, 134 R;180/99 number reaches a predetermined number, the card is invalidated.[56] References Cited 14 Claims, 4 Drawing Figures UNITED STATES PATENTS3,588,449 6/1971 Paterson ..235/6l.7 B

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Patented May 1, 1973 r 3,731,076

3 sheets -sh'ee'pl SYSTEM FOR PREVENTING IMPROPER USE F CREDIT CARDSThis invention relates to a system for preventing improper use of cardssuch as credit cards and bank cards.

In recent years, credit cards have come to be widely used in varioustransactions with shops, banks and like establishments. As is wellknown, each card has recorded thereon its identification number or theaccount number of the owner of the card. When a card is used in, say, anautomatic cash dispensing machine, the account number recorded on thecard is checked with respect to its validity, and only when the accountnumber has been recognized as valid, the desired transaction isperformed. In this case, however, only the validity or invalidity of theaccount number of the card is checked. Under this condition, even if thecard is used by an improper owner, the required transaction is made solong as the card is recognized as valid. To prevent this, it has beenproposed to give the proper owner of each card a secret number having apredetermined relation to the account number, so that when the user of acard puts it into the machine, he also enters the secret number hememorizes into the machine. The machine compares the account number readfrom the card and the secret number entered by the keyboard, and if theproper relation or correspondence is present between the two numbers,the user of the card is recognized as its proper owner, whereupon therequired transaction is conducted, that is, the machine dispenses anarticle or cash, or accepts a deposit.

On the contrary, if no such proper correspondence exists between the twonumbers, the card may be returned to its user, or collected into themachine so as not to be returned again. In the former case, it willbenefit the improper as well as the proper owner of a card. The properowner who must know the correct secret number of the card can introducethe returned card and the correct secret number into the machine again.The improper owner who cannot know the correct secret number can operatethe machine again and again with the returned card, entering variousnumbers into the machine by guesswork until he might finally get thecorrect secret number. This cannot occur in the latter case where thecard is not returned to the user when the proper correspondence does notexist between the account number and the secret number. However, this isvery inconvenient to the proper owner of a card, because once the cardis collected into the machine he cannot use it again, even when heremembers the correct secret number later. To solve this problem, thearrangement may be such that when the above-mentioned correspondencedoes not exist, the card is returned to the user, upon pressing of areturn push button, before entering of the secret number has beenrepeated a predetermined number, say, three times. In this case, if theproper correspondence cannot be attained after the secret number hasbeen entered twice, the proper user of the card may consider the secretnumber having'been incorrectly memorized, so that after getting thecorrect secret number he can properly use the card in the machine withthe correct secret number. However, this arrangement will benefit theimproper owner of a card, too. By repeatedly pressing the returnpushbutton to have the card returned after entering different secretnumbers into the machine two times in succession, the improper owner mayfinally get the proper correspondence without his card being collectedinto the machine.

Accordingly, the primary object of the invention is to provide a systemfor preventing improper use of cards such as credit cards, bank cards orthe like.

Another object of the invention is to provide a system for preventingimproper use of cards by unauthorized persons while giving the properowner of a card a chance to correct errors in entering the secret numberinto the machine.

Another object of the invention is to provide a system for preventingimproper use of cards, wherein the number of times the secret number ofa card has been erroneously entered into the machine is recorded in arecording medium, so that when the card has been repeatedly used untilthe above-mentioned number reaches a predetermined number, the card isinvalidated so as not to be used again.

The invention will be clearly understood from the following descriptionof. some preferred embodiments thereof with reference to theaccompanying drawings, wherein like reference numerals in differentfigures denote corresponding parts, and wherein:

FIG. 1 is an electrical block diagram of one embodiment of theinvention;

FIG. 2 is a schematic front view of a card-actuated machine theinvention is applied to;

FIG. 3 is a detailed diagram of the system of FIG. 1; and

FIG. 4 is an electrical block diagram of another embodiment of theinvention.

FIGS. 13 show one embodiment of this invention as applied to a cashdispensing machine. In FIG. 1, there is schematically shown a card 1 ofa well known type, on which various data are magnetically recorded. Thedata may include the identification number of the card or the accountnumber of the owner of the card, the number of times the card has untilthen been used, and other necessary information. When the card 1 isintroduced into the machine, a reader 2 reads the data on the card. Thedata read by the reader 2 are sent to a controller 3, which checks thedata, that is, whether the card number is valid, whether there is abalance left in the account, and whether the number of times the cardhas been used has exceeded a predetermined limit. If the data is foundimproper, a card returning device 4 is operated to return the card tothe user, or a card collector 5 collects the card into a suitablereceptacle, not shown. If the card data is found proper, the controller3 accepts the data manually introduced or entered by a data input device6, The data will hereinafter be referred to as the manual data.

The device 6 includes a keyboard or a dial, and the manual data includesthe secret number of the card, the amount of money requested to bewithdrawn, etc. The controller 3 checks the manual data to see whetherthe amount requested exceeds the balance left and whether there is apredetermined proper correspondence between the secret number and theaccount number.

If the arrangement is such that the balance left is recorded on thecard, the above checking is conducted by comparing the data concerningthe balance left as included in the card data with the data concerningthe amount of money requested to be withdrawn, as included in the manualdata. If it is possible to pay the amount of money requested, adispenser 7 is operated on the basis of the result of checking of thesecret number. If the amount of money requested exceeds the balanceleft, the device 4 operates to return the card to its owner and at thesame time an indicator 8 gives a corresponding indication.

The simplest method of checking the secret number is to see if there isa predetermined correspondence between the card number included in thecard data and the secret number included in the manual data. This methodrequires that the controller 3 includes only a coincidence circuit. Ifthe controller 3) has a memory device like a computer, it is addressedby the card data to derive a corresponding secret nmber so as to checkwhether the required correspondence exists between this derived secretnumber and the secret number included in the manual data. The memorydevice may also be addressed by the secret number in the manual data tolocate a corresponding card number so as to see if there is the propercorrespondence between the located card number and the card number readfrom the card used.

When the proper correspondence exists, the dispenser 7 operates todispense the amount of money requested to be withdrawn. If no suchproper correspondence exists between the two numbers, the indicator 8gives instructions that the user of the machine should enter the secretnumber again. If no proper correspondence has been attained between thetwo numbers after such entering of a secret number has been repeatedthree times, the device 4 operates to return the card to its owner. Atthe same time a register 9 stores the number of times the secret numberhas been erroneously entered or the number of times the card has beenreturned to the user. These numbers will hereinafter be referred to asthe error number. The error number stored in the register 9 istransferred to a writer 10, which magnetically writes the error numberon the card when it is returned to the owner. In the above example, thearrangement is such that when the secret number has been erroneouslyentered three times, the card is returned. This error number, however,may be greater or smaller.

If an error occurs with respect to a card on which an error number hasalready been recorded, the new error is added in the controller 3 to theprevious error number recorded on the card and the increased errornumber is sent to the register 9 and then written on the card in placeof the previous error number. If the new, increased error number storedin the register 9 reaches a predetermined limit number, the controller 3operates the collector 5 to collect the card into the machine.

If the error number is the number of times the secret number has beenerroneously entered, the error number becomes three when the secretnumber has been erroneously entered three times, so that the card isreturned to the user. Therefore, if the limit of the error number is setto 12, the card is collected when it is to be returned for the fourthtime.

If the error number is the number of times the card has been returned,the error number becomes one when the card is returned when the secretnumber has been erroneously entered three times. In this case, it thelimit of the error number is set to four, the card is collected when ithas been fraudulently used four times.

In the above example, the error number included in the card data ischecked after the controller receives the manual data. The arrangementmay also be such that the error number is checked upon reading of thecard data by the reader 2. With this arrangement, to take the abovelatter example, even when the card has been fraudulently used fourtimes, the card is returned with a notice or something to the effectthat the card can no longer be used, and if this card should be used forthe fifth time, it is immediately collected into the machine.

The arrangement may also be such that the card returning device 4operates when no manual data is introduced through the device 6 for apredetermined period of time after the card was introduced. In thiscase, the error number in the card data is increased by one.

FIG. 2 shows a cash dispenser having a front panel 10. Two slots 11 and12 are formed in the panel 10. The card is introduced or returnedthrough the slot 11. The card may be delivered out together with cash ora receipt through an outlet 13 formed below the slot 11. A mortgage suchas a check is introduced through the slot 12. The data input device 6has a keyboard 14 provided below the slot 12, and the indicator 8 has awindow above the slots 11 and 12.

Turning to FIG. 3, which shows the arrangement of FIG. 1 in more detail,the data read by the card reader 2 from a card inserted through the slot11 in FIG. 2 is stored in a register 16. The identification number ofthe card included in the data stored in the register 16 is applied to anadder 19. The checker l7 checks the card number. If it has beenrecognized as invalid, the checker 17 produces an output to be appliedthrough an OR circuit 20 to the card collector 5, which collects thecard into the machine. On the contrary, if the card number has beenrecognized as valid, the checker 17 produces an output to be applied toan AND circuit 21 and a timer 22.

The user of the machine operates the keyboard or dial 6 to enter thenecessary data into the machine. The secret number included in thismanual data is applied through the AND circuit 21 to a register 23 to bestored therein. A counter 24 counts the number of times of introductionof the manual data. The counter is so designed as to produce an outputwhen that number becomes three. This output from the counter 24 isapplied as an inhibit input to an INHIBIT element 26 through an ORelement 25. The OR element 25 receives as the other input the outputfrom the timer 22. The timer 22 produces an output a predeterminedperiod of time after receiving the output from the checker 17.

When neither the counter 24 nor the timer 22 produces any output, thesecret number stored in the register 23 is allowed to pass through theINHIBIT element 26 into a checker 118, which checks whether there is apredetermined correspondence between the card number read from the cardand the secret number entered by the keyboard. If the correspondenceexists, the checker 18 produces an output to be applied as an inhibitinput to an INHIBIT element 27, rendering this element inoperative. Thisoutput from the checker l8 is also applied to the card returning device4through an OR element 29 on the one hand and to the cash dispenser 7 onthe other. The device 4 returns the card to its owner and the device 7dispenses the required amount of cash. At this time a register 9 storesthe numerical value of 0, which is written by the writer 10 on the cardto be returned as the error number.

If the proper correspondence does not exist between the card number andthe secret number, an indicator controller 30 operates to give a commandthat the user of the machine should again enter the secret number. Whenentering of the secret number has been repeated three times, the counter24 produces an output to be applied as an inhibit input to the INHIBITelement 26 through the OR element 25 after the contents of the register23 have been transferred to the checker 18. The output from the counter24 is also applied to the controller 30 to prevent its operation. If atthe third entering of the secret number there is still no propercorrespondence between the secret number and the card number, the ANDelement 28 receives the outputs from both the OR element 25 and thechecker 18 to produce an output expressing the numerical value of l tothe adder 19. The adder adds this 1 to the error number included in thecard data, and the resultant numerical value (a new error number) isstored in the register 9. As previously mentioned, the timer 22 producesan output a predetermined period of time after the introduction of acard into the slot 11. This output is also applied to the adder 19 sothat l is added to the error number.

The error number stored in the register 9 is checked by a checker 31. Ifthe number exceeds a predetermined number, say, three, the checker 31applies an output through the 0R element to the card collector 5 tocollect the card into the machine. However, if the error number is threeor less than three, the checker 31 applies an output through the ORelement 29 to the card returning device 4. At this time, the errornumber stored in the register 9 is written on the card by the means ofthe writer 10.

In the above example, the card is collected into the machine by means ofthe collector 5. What is intended here is to prevent the card from beingused again. Therefore, the card may be returned to the owner providedthat it has been invalidated by any suitable means. To invalidate thecard, the card data may be changed or erased, or the card data may bememorized in the machine as invalid so that when used again the card maybe recognized as invalid, or the card may be physically damaged bypunching holes therein.

FIG. 4 shows another embodiment of the invention as applied to a cashdispenser included in an on-line banking system. v

A card 1 is put into a card reader 102 included in a terminal machine140 provided at the counter in a bank. The user of the card manuallyoperates a data input device 106 having a keyboard to enter the secretnumber of the card into the machine. The card number or account number,say, 1150 read by a card reader 102 is stored in the register 109 underthe control of a controller 103, and thence applied through a scanningcircuit 131 and an output circuit 132 to an interface circuit 141 of acomputer 150, so that a secret number, say,l 130 corresponding to thecard number 1150" is withdrawn from a memory device 142 in the computer150 so as to be stored in a resister 143. The secret number entered bythe user of the machine by means of the input device 106 is stored inthe register 109 under the control of the controller 103 and thenceapplied through the scanning circuit 131, the output circuit 132 and theinterface circuit 141 to a register 144 in the computer 150 to be storedtherein. The two numbers stored in the registers 143 and 144,respectively, are compared by an arithmetic element 145 to see if apredetermined correspondence exists between the two numbers. The resultof the comparison is applied to an input circuit 133 in the terminalmachine 140.

If the predetermined correspondence does not exist between the twonumbers, the error number (that is, the number of times the secretnumber has been erroneously entered) stored in the memory device 142 ofthe computer is withdrawn therefrom to be stored in the register 143. Onthe other hand, a predetermined limit error number is set in a settingdevice 146 and stored in the register 144. The two numbers stored in theregisters 143 and 144, respectively, are compared by the arithmeticelement 145. If the error number is equal to the limit number, theelement 145 produces an output to be applied through the input circuit133 of the terminal machine to the collector 105 under the control ofthe controller 103, so that the collector collects the card into themachine so as not to be returned to the owner. In this case, the card orits number may be invalidated by any other suitable method just as inthe previous embodiment.

If the error number is less than the limit error number, it is increasedby one and the increased new error number is stored in the memory device142 of the computer 150. At the same time the element applies an outputto the input circuit 133 of the terminal machine to actuate the device104 to return the card to its user.

If the predetermined correspondence exists between the secret numberentered through the keyboard and the corresponding secret number storedin the computer, so that the user of the card is recognized as itsproper owner, the arithmetic element 145 produces an output to beapplied through the input circuit 133 to the card returning device 104on the one hand and the cash dispensing device 107 to render the sameready for operation. Under this condition, the user of the machineenters the amount of money he desires to withdraw into the machine bymeans of the keyboard. The entered'amount is stored in the register 144,while the present balance (say, 3 16,000) of the account of the cardowner as memorized in the memory device 142 is withdrawn therefrom to bestored in the register 143. The balance and the required amount of moneyare compared by the arithmetic element 145. If the amount is less thanthe present balance, the new balance is stored in the memory deviceinstead of the previous balance, and at the same time a signal isapplied to the input circuit 133 to actuate the dispensing device 107 toautomatically dispense the required amount of cash. On the other hand,the error number is rendered zero or decreased by subtracting a certainnumber from the previously recorded error number.

Thus, in accordance with the invention, fraudulent use of cards byimproper owners can effectively be prevented, while at the same time theproper owner of the card is given a chance to correct his or herprevious errors in entering his secret number into the machine, so thatit never happens that the card used by its proper owner is invalidateddue to mere error in entering his or her secret number into the machine.

In the above embodiment, the secret number entered by the device 106iscompared with the secret number previously stored in the computer andderived on the basis of the account number read from the card used. Thearrangement may also be such that the account number read from the cardis compared with the account number stored in the computer and derivedtherefrom on the basis of the secret number entered through the inputdevice 106.

What we claim is:

l. A system for preventing improper use of cards having necessary datarecorded thereon in card-actuated machines, comprising: means forreading said data from each said card; means manually operated by theuser of said card for inputting data into said system; means forchecking whether a predetermined correspondence is present between saidread data and said input data; means for storing the number of times ofabsence of said predetermined correspondence with respect to each saidcard, said storing means having the capability of indicating the totalnumber of said absence of predetermined correspondence during the lifeof said card; means for increasing by one the number stored in saidstoring means when said checking means has decided that there is nocorrespondence between the read data and the input data; means forreturning said card after said number has been stored; and means forinvalidating said card when said number becomes a predetermined number.

2. The system of claim 1, wherein said storing means stores said numberon each said card.

3. The system of claim 1, wherein said storing means is a computer.

4. The system of claim 1, further including means for decreasing saidnumber stored in said storing means when said predeterminedcorrespondence is present.

5. The system of claim 1, wherein said invalidating means is means forcollecting each said card into said system so as not be returned to theuser of said card.

6. The system of claim 1, wherein said invalidating means includes meansfor returning each invalidated card to the user thereof.

7. The system of claim 1, wherein said checking means compares said readdata and said input data.

8. The system of claim 3, wherein said checking means compares saidinput data and the data derived from the computer on the basis of saidcard data.

9. The system of claim 3, wherein said checking means compares said carddata and the data derived from said computer on the basis of said inputdata.

10. A system for preventing improper use of cards in a card actuatedmachine comprising: card means for feeding data into said system, saidcard means having data recorded thereon; means for reading said recordeddata; means manually operated for feeding data into said system; meansfor determining that said manually fed data is uniquely associated withsaid recorded data; means for incrementally recording an indication ofthe number of incorrect determinations of said unique association withrespect to an individual card means, said recording of said incorrectdeterminations having the capability of indicating the number of saidincorrect determinations during the life of said card means; and meansfor returning said card.

11. An apparatus in accordance with claim 10, wherein said determiningmeans includes a means for comparing said manually fed data with apreselected number stored within said system, said preselected numberbeing uniquely associated with said recorded data.

12. An apparatus in accordance with claim 11, wherein said card means isinvalidated after a predetermined number of said incorrectdeterminations is recorded.

13. An apparatus in accordance with claim 12 including means to recordsaid indication of the number of incorrect determinations on said cardmeans.

14. An apparatus in accordance with claim 12 including means for storingsaid indication of the number of said incorrect determinations, saidstoring means having the capability of storing said indication duringthe life of said card.

1. A system for preventing improper use of cards having necessary datarecorded thereon in card-actuated machines, comprising: means forreading said data from each said card; means manually operated by theuser of said card for inputting data into said system; means forchecking whether a predetermined correspondence is present between saidread data and said input data; means for storing the number of times ofabsence of said predetermined correspondence with respect to each saidcard, said storing means having the capability of indicating the totalnumber of said absence of predetermined correspondence during the lifeof said card; means for increasing by one the number stored in saidstoring means when said checking means has decided that there is nocorrespondence between the read data and the input data; means forreturning said card after said number has been stored; and means forinvalidating said card when said number becomes a predetermined number.2. The system of claim 1, wherein said storing means stores said numberon each said card.
 3. The system of claim 1, wherein said storing meansis a computer.
 4. The system of claim 1, further including means fordecreasing said number stored in said storing means when saidpredetermined correspondence is present.
 5. The system of claim 1,wherein said invalidating means is means for collecting each said cardinto said system so as not be returned to the user of said card.
 6. Thesystem of claim 1, wherein said invalidating means includes means forreturning each invalidated card to the user thereof.
 7. The system ofclaim 1, wherein said checking means compares said read data and saidinput data.
 8. The system of claim 3, wherein said checking meanscompares said input data and the data derived from the computer on thebasis of said card data.
 9. The system of claim 3, wherein said checkingmeans compares said card data and the data derived from said computer onthe basis of said input data.
 10. A system for preventing improper useof cards in a card actuated machine comprising: card means for feedingdata into said system, said card means having data recorded thereon;means for reading said recorded data; means manually operated forfeeding data into said system; means for determining that said manuallyfed data is uniquely associated with said recorded data; means forincrementally recording an indication of the number of incorrectdeterminations of said unique association with respect to an individualcard means, said recording of said incorrect determinations having thecapability of indicating the number of said incorrect determinationsduring the life of said card means; and means for returning said card.11. An apparatus in accordance with claim 10, wherein said determiningmeans includes a means for comparing said manually fed data with apreselected number stored within said system, said preselected numberbeing uniquely associated with said recorded data.
 12. An apparatus inaccordance with claim 11, wherein said card means is invalidated after apredetermined number of said incorrect determinations is recorded. 13.An apparatus in accordance with claim 12 including means to record saidindication of the number of incorrect determinations on said card means.14. An apparatus in accordance with claim 12 including means for storingsaid indication of the number of said incorrect determinations, saidstoring means having the capability of storing said indication duringthe life of said card.